Nepse Index Declines, Trading Volume and Most Stocks Drop; Calls for Easier Bank Investments and Margin Trading Intensify

On the final trading day of the week, Nepal Stock Exchange (Nepse) experienced a decline, continuing the downward trend from the previous day. The Nepse index dropped by 9.22 points, closing at 2,757.97. Similarly, the Sensitive Index decreased by 0.69 points, while both the Float Index and Sensitive Float Index saw drops of 0.50 and 0.21 points, respectively.

Along with the index, the total trading volume also saw a decline. After a consistent drop throughout the week, this day also reflected lower trade activity. While Wednesday saw trading worth NPR 5.20 billion, the market on this day witnessed 319 stocks traded 56,824 times, amounting to NPR 5.02 billion, with 168.55 million shares bought and sold.

Shares of Vikas Hydropower were still traded at a positive circuit level, rising by NPR 32.10 to close at NPR 353.40. On the other hand, the share price of JanUtthan Community Microfinance fell by 4.65%. Other stocks saw a modest increase of less than 3%.

Among the top stocks in terms of trading volume, Himalayan Re-Insurance led with a trade volume of NPR 24.09 million, followed by Nepal Re-Insurance with NPR 20 million, and Balephi Hydropower with more than NPR 14 million.

In terms of sub-indices, one out of 13 sub-sectors showed growth, while 12 saw a decrease. The Non-Life Insurance sub-sector increased by 0.14%, while the others witnessed declines of less than 1%.

Fundamental analysts believe that investors are waiting for key announcements, particularly regarding easing restrictions for banks to invest in stocks and making margin trading more accessible. Should these changes be implemented, analysts predict a positive shift in the market. Sources from the central bank have confirmed that preparations for both measures are in their final stages.

Moving to Technical Analysis

Technical analyst Ajit Khanal pointed out that the market broke below the 50-day moving average, closing beneath it. Recently, the market had struggled with the 50-day moving average, but low trading volumes have led to a weakening market. However, there is hope that the market might see some positive movement at the 61% retracement level. Despite this, most technical indicators are showing negative signals. If the market breaks the 61% retracement level, it may head towards a more negative direction. Additionally, the Relative Strength Index (RSI) today fell below 40, signaling market weakness. Trading volumes were the lowest since March 26, and after 12:10 PM, the market continued to decline without reaching any new highs. Even among the top 10 brokers, trading was balanced with no clear trend.